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Fuzzy Math Behind Florida’s Health Insurance Projections, Group Says

After the Florida Office of Insurance Regulation released a chart and related information last week projecting that individual monthly health insurance premiums would rise 30 to 40 percent next year thanks to Obamacare, some critics cried “fuzzy math!”

This week, the Florida Center for Fiscal and Economic Policy, a left-leaning nonprofit research and education group, issued a brief criticizing the OIR’s methodology for calculating rate increases, and panning the agency’s conclusions as providing “no credible comparison of the impact of PPACA on rates whatsoever.”

Moreover, the group said, the official projections are “likely to result in direct harm to consumers.”

Among the problems cited in the preliminary analysis conducted by the Florida Center:

  • The OIR compared post-Obamacare average premiums for each individual insurer’s plan with a single statewide pre-Obamacare average taken across all insurers in the individual market;
  • The OIR omitted the impact of premium tax credits for individuals buying health plans on the federally-run insurance exchanges;
  • The OIR compared “apples to oranges” by failing to factor into its projections the fact that statewide averages for pre-Obamacare premiums included a “wide array of low-value plans” — including plans with extremely limited benefits, such as no prescription drug coverage; and high-deductible plans, where the insured first must pay hefty out-of-pocket costs before the insurer begins to cover services.

As the Florida Center noted, Florida’s individual health insurance market covers about 700,000 people — less than 5 percent of the state population.

That means the OIR’s projections cannot be used to draw any conclusions regarding the impact of Obamacare on those who receive health insurance through their employers, which includes the majority of Floridians.

The Florida Center has not yet published the analysis on its website, but sent an issue brief to media on Tuesday afternoon highlighting the findings.

This story is part of a collaboration that includes The Miami Herald and Kaiser Health News.